Do Now Exercise

Marketing I

Mr. GallucciLesson 43

Obj. Introduce distribution planning and “control vs. cost” – Case Study Assessment

Distribution Planning

Obj. Introduce distribution planning and “control vs. cost” – Case Study Assessment

•Distribution Planning•Physical movement of product

•Transfer of ownership from producer to consumer

•Decisions: Multiple Channels? Control vs. Cost, Distribution Intensity, and e-commerce.

Multiple Channels

Satisfying both industrial and consumer markets. (industrial customer: An entity that buys a product with the intent to use it for operating a business)

Using multiple distribution channels to maximize availability of product (and profit)Obj. Introduce distribution planning and

“control vs. cost” – Case Study Assessment

Cost vs. Control

Control: The amount of control a business keeps over the distribution of it’s products

Cost: How much it will cost to distribute the product… effects profitability

Control up, Cost up… vice versa.

Obj. Introduce distribution planning and “control vs. cost” – Case Study Assessment

Cost vs. Control Sales Force

Internal (direct) sales force Company has control over sales force. Associates on payroll, benefits, expenses.

Agent (external) sales force Company loses control over sales force Cost significantly less than hiring sales force

Cost of sale consistent to sales generated

Obj. Introduce distribution planning and “control vs. cost” – Case Study Assessment

Cost vs. Control

On who’s terms? Manufacturer must determine who to do business with

Larger retail stores (Walmart, Home Depot) are dictating terms of distribution to manufacturers

Could drive up price of distribution Could drive manufacturer away from “giants”

Obj. Introduce distribution planning and “control vs. cost” – Case Study Assessment

Activity

Obj. Introduce distribution planning and “control vs. cost” – Case Study Assessment